Gold prices trended lower on Wednesday and are set to post their first loss in three sessions after the U.S. inflation report was “overall benign” from the market’s perspective, said Jim Wyckoff, senior market analyst and columnist at Kitco.com.
On the Comex, gold for delivery in December lost $10.10 or 0.4 percent to $2,533 an ounce.
“It is likely that some of the selling pressure in gold following the CPI release was based on a ‘buy the rumor, sell the fact’ scenario. Short-term futures traders expected a dovish CPI and initiated long positions in advance. They then made profits after the dovish CPI numbers were released,” Wyckoff said in a market commentary.
The consumer price index rose a modest 0.2 percent in August, the government said Wednesday, matching Wall Street’s forecast. But a price measure that strips out volatile food and energy costs, the so-called core index, rose 0.3 percent — a bit more than expected and the biggest increase in five months.
Naeem Aslam, senior investment advisor at Zaye Capital Markets, said “gold traders are scratching their heads… unsure what to make of the latest inflation data and what could be considered neutral” regarding the Federal Reserve’s next move. “The numbers are sending mixed signals and as the likelihood of a 50 basis point rate cut at the Fed’s Sept. 18 meeting fades, gold prices are coming under pressure.”
